In 1971 Makor Issues and Rights Ltd. purchased 568,000 square meters of land on Har Homa, located near Kibbutz Ramat Rachel, South Jerusalem, reserving an option to buy additional 364,000 sq. meters there, a total of 932,000 sq. meters of land. Since then, Makor invested 25 years in development of the Har Homa neighborhood. The famous architect Ram Carmi designed the project and its estimated price in US dollars was 1.5 billion. The Har Homa neighborhood was supposed to comprise 8,200 residential units, public buildings, shopping malls, hi-tech parks, hotels, a country club, a golf course, a Peace Park and a Peace Center. (See Drawings)

Makor prepared a number of architectural projects for development of a Har Homa residential neighborhood. Much time and money was invested in planning the neighborhood.

On November 16, 1979 the Housing Ministry Jerusalem Region Supervisor wrote to Makor that he wanted to summon a meeting at the City Engineer's office, in order to promote the initiative of Makor in Har Homa. However, the Housing Ministry Jerusalem Region Supervisor's attempt failed after the City Hall's statement that there was a priority to building in North Jerusalem.

On March 06, 1986, Makor applied to the City Engineer with request to elevate the neighborhood construction project. On March 31, 1986, Makor received a reply from the City Hall Attorney. The letter stated that there really existed a priority to building in North Jerusalem.

On April 22, 1986, the Israel Land Authority wrote to the Ministry of Agriculture that it had no objections to building the Makor's project, but Makor had to take care of repositioning. Makor prepared a brochure about additional alternatives to the project and sent it to the government cabinet ministers. The ministers endorsed the project and wished us much success.

On December 11, 1989, PM and Minister of Finance Shimon Peres addressed Makor with a request to collaborate with the Jerusalem Development Authority for building the Har Homa neighborhood. Minister of Interior Aryeh Deri, Governor of Jerusalem Teddy Kolek and Jerusalem Development Authority Head Uzi Vecksler have also addressed Makor with similar requests.

On November 28, 1990, as a result of these appeals, Makor concluded an agreement with the Jerusalem Development Authority on joint development of the Har Homa neighborhood in Jerusalem.

In Section 4.8 of its agreement with Makor, the Jerusalem Development Authority undertook to design the neighborhood by itself.

In Section 8 of the agreement the Jerusalem Development Authority undertakes to take care of financing and accomplishing the infrastructure works.

The Jerusalem Development Authority appointed Architect Ram Carmi to design the Har Homa neighborhood and Architect Dan Vacksman to coordinate the design and accomplishment of the infrastructure. The coordinated design was submitted to the Jerusalem Regional Committee on March 20, 1991. The area of the project submitted to the Committee was 1,228,795 sq. meters. (Carmi project #1)

Eventually, Makor found out about an intention to seize the area of 1,850,000 sq. meters on Har Homa by the State of Israel. This intention was affirmed despite the neighborhood building plan prepared by the Jerusalem Development Authority, and despite the Authority's commitment to carry out the project.

The reason for increasing the expropriation area beyond the Carmi project #1 was to support the statement that Makor owns only a part of the project land.

In order to diminish the value of the land, Jerusalem Development Authority Representative applied to the Regional Committee with request not to discuss the Carmi project #1, since the land was doomed for expropriation.

When Makor realized that expropriation was inevitable and that the company was going to be deprived of the project in which it had invested 20 years of work, we asked Architect Ram Carmi to prepare a plan that would include the land owned by Makor and Keren Kayemeth Le-Israel, as well as the land patches of people, who we believed were ready to cooperate with us in the Har Homa project development, and who would oppose the expropriation. Architect Ram Carmi prepared such a plan. The projected neighborhood was supposed to occupy the area of 1,519,919 sq. meters (Carmi plan #2).

On May 16, 1991, the announcement regarding the intention of expropriation of 1,850 dunam in the area known as "Har Homa" in Jerusalem was published.

On June 6, 1991 the Jerusalem Development Authority sent Makor a letter stating that it viewed itself obligated by the Development Agreement and if the land were in the hands of Makor, the Authority would make every effort to accomplish everything it had undertaken according to the Agreement in the most efficient, fast and deliberate manner.

On June 16, 1991, Makor submitted its objection to the expropriation to the Israel Land Authority Advising Committee on Expropriation Matters, appointed by the General State Attorney. The full text of the objection was attached to the Supreme Court case #3956/92.

In spite of all the above, on July 12, 1992, the Finance Minister adopted the recommendation of an unauthorized committee and signed the Har Homa Expropriation Act.

According to Section 7 of the Land Decrees Law, Mr. Itzhak Modai signed the Expropriation Act. It fell on the last day of his cadency as a Finance Minister, whereas 7 days before that, on July 5, 1992, the government issued new guidelines regarding change of priorities.

On August 11, 1992, Assistant to the Finance Minister wrote to Makor that the Housing Minister, Israel Land Authority and Jerusalem Development Authority affirmed the expropriation. Thus the Jerusalem Development Authority infringed the agreement it concluded with Makor.

On August 12, 1992 Makor filed a petition for revocation of the expropriation in Har Homa, Jerusalem. In the petition the company stated that Makor and its associates collaborated with the Jerusalem Development Authority for building a neighborhood and that Architect Ram Carmi prepared, per Makor's request, a plan that did not require expropriation (Carmi plan #2).

At the hearing Makor also stated that the expropriation was unjust, since the company was willing to build on the land and was able to do so.

On the basis of the petition statements and the willingness of Makor to build the neighborhood, a decision was made on May 19, 1993. According to the decision, the parties had agreed to find a possibility not to expropriate the land and that the petitioner would develop a neighborhood, while the government would carry no development expenditures.

On January 5, 1993, on the basis of the arrangement of revocation of the expropriation, Makor accepted a proposition from Envicta Co. (a company belonging to Mr. Rotschield, UK) for planning and administration of Country Club and Golf field at the site. According to the proposal, Envicta guarantees 30,000 golfers' visits per year.

On January 20, 1993, on the basis of the arrangement on revocation of the expropriation, Makor concluded an agreement with a French supervision company that undertook to supervise planning and construction works and to take care of arranging insurance from a French insurance company against design and construction flaws.

On January 31, 1994, on the basis of the same arrangement, Makor signed a preliminary agreement with Migdal Insurance Ltd, according to which Migdal would cover the costs of infrastructure for each residential unit, as well as the costs of building all the apartments on the land of Makor. In addition, Migdal undertook to purchase half of the apartments built on Makor's land in order to rent them out according to Capital Investment Support Act.

According to the Preliminary Agreement Makor accepted an offer from Africa-Israel Ltd, according to which the latter would take care of marketing, while its subsidiary company would administer the construction works. On November 11, 1994, Africa-Israel issued shares of its deal with Makor on the stock exchange.

On June 25, 1993, the government statement containing arrangement details the government was ready to accept in order to revoke the expropriation, was submitted to the Court. According to that statement, if the provisions of the statement were agreeable for both parties, the Supreme Court would be requested to consider it a verdict.

On July 4, 1993, the Parties informed the Court that negotiations were held in order to advance towards arrangement, and requested to postpone the deadline in order to conclude the negotiations.

On August 3, 1993, the Parties repeated their request to the Supreme Court, regarding postponement of the negotiation deadline.

On January 20, 1994, the Parties informed the Court that the negotiations were reaching their end and that the Parties were on the verge of consensus.

As a result of the negotiations, the Parties deliberated the final version of the arrangement.

On March 08, 1994, Makor signed an agreement, according to which it accepted all the conditions posed by the government for revocation of the expropriation. The signed agreement was sent to the State Attorney in order to be signed on behalf of the government.

On September 15, 1993, Kohl Ha'ir newspaper published an article, according to which the Housing Ministry and the City Hall were not ready to leave planning at the hands of landowners, since the landowners were to build luxurious apartments. This served as a reason for the government's refusal to sign its own Arrangement Proposal.

Why was the land expropriated if the intention was to build only on part of it?

Why was the land expropriated from an enterprise company, if the goal was and remains to be building a residential neighborhood?

Why was the land expropriated from an enterprise company that had a signed agreement with the Jerusalem Development Authority on development of a neighborhood?

Well, don't break your head, since the only intention was and remains to be distribution of cheap rewards to fellow members. Both the benefactors and the recipients are interested in political unrest, in order to justify transfer of properties for cheap prices. As regards the reward distribution issue, there is no difference between left and right governments. Everybody wants to give to a friend, no argument about that. The real question is whether the public will keep silent when such governmental acts lead to political confrontation and violation of property rights, while a better alternative does exist.